The effect of microfabric on the mechanical behaviour of clays has been explored previously based on the response of dispersed and flocculated microfabrics only. However, the natural clays often have the geometric arrangement of particles between these two extreme cases which can be termed as intermediate microfabric. This paper explores the formation of intermediate microfabric of kaolin clay and its impact on soil's consolidation behaviour by performing self-weight consolidation, slurry consolidation and 1-D consolidation tests. The effect of calgon content (dispersing agent) on geometric arrangement of the particles has been evaluated through cluster size distribution by performing double hydrometer tests. Then these clay slurries have been used to perform the AFM (Atomic Force Microscopy) test to obtain the variation in average angle of particle orientation with respect to the calgon content present in the slurry. AFM technique provides 3D image of the clay sample and 2D image with Z-information with the potential of measuring intermediate microfabric of clayey soil quantitatively including dispersed and flocculated microfabrics. Other traditional techniques such as SEM, TEM & XRD are limited to only qualitative analysis of soil's microfabric, thus, having no capability to measure intermediate microfabric of clay. A methodology of preparing bulk specimens of clay with intermediate microfabric has been developed using slurry consolidation technique; and then these specimens have been consolidated under 1-D loading to evaluate the effect of intermediate microfabric on compressibility and permeability of clay. In this study, all the experiments reports that the dispersed type geometric arrangement increases with the increase in calgon content in soil up to 2 % and then the reverse behaviour is observed at 3 %; which may depend on the required amount of sodium cations to neutralize the negatively charged faces of the clay platelets present in the slurry. © 2012 Springer Science+Business Media Dordrecht.